MM Project - Asian Paints Market Research PDF

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Asian Paints Market Research...

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Marketing Management Group Project Asian Paints – Company Analysis

Group Members: Tanmay Narle Harshit Jain Aayush Goel Raghul S. Navya Ann Abrahem 2019-20

Acknowledgement We are very grateful because we managed to complete our Marketing Management Project within the time given by our lecturer Mr. Venkatesh Umashankar. This assignment is completed with contribution and co-operation of all the team members. Group members Tanmay, Raghul, Harshit, Aayush and Navya. Our Project on “Asian Paints Ltd” would not have taken the present form in the absence of invaluable guidance, inspiration and cooperation from many people. We thank our lecturer Mr. Umashankar and his teachings for guiding and encouraging us to complete the project. We respect and thank Mr. Umashankar for giving us this opportunity to do this project and providing us all the support and guidance which make us complete the project on time.

Index Sr. No.

Particulars 1 Executive Summary 2 Introduction

3 Competetive Scenario

4 Company's Analysis

Proposed Future 5 Roadmap 6 Refrences

Sub Section The Brand and Company Marketing Mix STP Company Stats Financial Scenario Market Summary Market Trends Company's Competetion Competitor's strength and weakness Pestle Analysis Porter 5 forces analysis SWOT Analysis Enterprise risks

Page No. 3 6 7 10 14 15 16 17 19 19 22 24 27 28 29 31

Executive Summary This project is to analyse the market and financial scenario of Asian Paints Ltd. And give future suggestions for the company. The suggestions and market strategy for company are assumed and can be feasibly implemented. After going through company’s history and data we found below highlights: Asian Paints is an Indian Based MNC, founded in 1942 by Mr. Champaklal Choksey, Mr. Chimanla Choksey. The company has its business in selling, distributing and manufacturing paints, coatings and home décor products. The headquarters of the company is in Mumbai, Maharashtra. The company has completed 75 years in market and have been doing very well. Their motive is to provide people a customised experience with more colours, design, innovation, product, service and formats. The company is third largest in Asia and largest in Indian market paint corporation. It is operating in 16 countries and selling its products in mor e than 65 countries. The company has 27 paint manufacturing facilities globally. The company holds very attractive distribution policy and proper distribution channel with more than 15000 dealers in 3500 small and big cities. The company is a part of NSE NIFTY 50 and BSE 30S&P. Their vision is “to be the fore runner of inspiring décor and to actively empower customers to create their dream homes”. They have been offering Wall coverings, Waterproofing, paints, kitchen fittings, bath fittings, adhesive and services. They have joint venture with PPG Industries Inc., USA, and have brands like BERGER Paints, Apco Décor, Kadisco and many more across 15 countries. The company sells its product in    

Asia 48% Africa 20% Middle East 26% South pacific %

The company has entered Home Décor space in India and acquired around fifty-one percent stake in Sleek Group, a kitchen décor firm in 2013. Company launched a SMART Kitchen range recently. In 2017 Company acquired the balance 49% from its erstwhile promoters. Company’ R&D facilities are one of the best in market and it has over 250 scientists support and technology development. This is the reason for company’s large and diversified product range. The offers all types of available paints type and a huge range of hardware fittings for kitchen and bathroom. It starts from low end to the premium level. Considering the Indian market, the company makes all sort of products suitable for different climate, demographic and price. The company introduced a character called GATTU which helped them entering the rural market of India. Company introduced Digital platform where people can experience the Asian Paints Colours and designs from their Smartphones sitting at home. Company also provide samples and catalogue with customer guide so that people can have best experience. Company is trying to reduce Carbon footprints by going green, they are doing so by reducing rutile (a type of titanium dioxide, which is core to achieving pigmentation) by using types of low carbon substitutes. They are trying to increase manufacturing efficiency and adopting new methods to optimise their production.

In 2019 they have introduced futuristic, high quality products. They have launched new 23 products in the decorative paints segment and 15 in the industrial paints segment. Asian Paints introduced Royale play which was a breakthrough. Royale Play was a service provided by company wherein painters from company themselves will paint unique designs and colours. It ensured that the costumers get whole customisation and trained painters gave better outputs.

Introduction The Brand and Company Asian Paints- the Company started off its first journey in 1942, since then the company has reached a huge milestone. The company was started by 4 friends as partnership firm, they took up on the world’s largest paint manufacturing company in our country at that time. Over the next 2 and half decades, Asian paints started to dominate and become a corporate force, it later went on to become the country’s leading paint manufacturer with a large turnover of about Rs 194 billion. It started dominating market since 1967.The company formulated itself and it was known for its

strong innovation spirit and high consumer-focus. Asian paints have built the reputation on the lines of professionalism and quality over its competitors, it operates 16 countries and has 27 paint manufacturing facilities in the world. The company also has consumers in over 65+ countries. The company has the following subsidiaries 

Berger International,



Asian Paints Berger and many others.

Asian Paints has devised its strategy in the following categories1.

Decorative paints category- As a part of the Decorative paints category the company has the following segments

   

Interior Wall special paints Exterior Wall special paints Enamel paints Wood Finishes

Asian paints in its product portfolio also offers 

Water proofing



wall coverings and



adhesives

2. Home Improvement and Decoration category- As a part of this category the company has the following segments 

Kitchen and



Bath fittings

Marketing Mix

Product

Place

Price

Promotion

Marketing mix Product In terms of Product Asian Paints are one of the leading manufactures of as distributers of decorative and industrial coating. They also provide complete solution services for home painting. The products are all of acrylic type and they have varied properties such as sunlight resistance, washable paints, leak proof and they are long lasting when compared to other products in the market. They provide range of products and services, from paint products, tools used in painting and other accessories. The main products and their detailed explanations are as follows  Industrial coatings the one that are thin coating used to enhance specific properties such as corrosion resistance, wear resistance, conductivity, etc paints used for these purposes for Road markings, floor and protective coatings.  We can define decorative paints as paints used to embellish both the exterior and interior of a building. The main aspect that they cover includes metal and surface paints exterior and interior wall paints.  We define Ancillaries as wood primer, exterior wall putty and acrylic wall putty.  The most unique feature of Asian paints is Asian paints Royale as in this they offer colours to decorate your house and these services are directly provided by the painters of the company. Extending their line of services, they also tapped market of automotive paints. This was a joint venture with the company called PPG industries and now they go by the name PPG Asian Paints. The products that they manufacture mostly include body and plastic coating

Place Asian Paints has marked its presence at least in nineteen countries of the world. And out of the nineteen counties they are present in they have set up manufacturing facilities in all of them and have more then 25+ plants currently, due to this they have become the number one paint manufacturer in the world The distribution channel of Asian Paints products is done through five regions major regional distribution segments that are available worldwide via, Caribbean region, Middle East region, South Pacific region, South-East Asia and South Asia. They are targeting to expand their market in south Asia and for the same reason they are opened A massive research and development centre has been opened in India. The company is dependent on its dedicated manpower that enables the company to harness all the available information and technology solutions in order to increase the operations efficiently. Asian Paints has stopped the wholesaler segment or bulk buyer and has started direct selling to the individual customer. They began their operations by concentrating on the semi-urban and rural areas and then later again on the urban areas. Then they ventured into the retail market, and they initiated an open-door policy for the dealers and started a nationwide marketing and distribution. They partnered with several distribution network across the country to sell Asian Paint products.

Price The price point of Asian Paint is a bit higher when compared to its competitors because of the premium quality and service they offer. In order to implement this policy, they kept a close watch on its competitors pricing point. The decisions regarding the price point of the products depends heavily on various factors like the procurement of the raw materials, Petro-products, taxes envisaged, excise duty and various other factors. The change in the competitors price affect the brand heavily. So, the constant evaluation or periodic valuation of the pricing dynamics has become compulsory for high – end companies like Asian Paints.

The brand has laid importance on flexible pricing policy for its products. They have created various segments in the society to choose their target audience for particular product. The price points of its products and services keep varying according to the properties of its each product and range. One of their products that is Asian royal product range targets only the high-income groups. value based pricing strategy to make it affordable is followed for medium and economy segment the price range is kept according to the properties of every brand.

Promotion The brand always focuses marketing its products in the most unique and attractive way. In the early stage hey used the tag line lose your temper, use Tractor Distemper to promote one of their brandnamed Tractor Distemper. They created a mascot named Gate which was created by the famous cartoonist R.K Laxman in the year 1954 to target the middle-class segment. The figure Gattu became very famous due to his endearing appearance, which created a lot of positive marketing for the brand. They believed in maintaining consistency of having a hold and using the same advertisement for more than four decades, it was phased out in a rebranding initiative in the year 2002. In the rebranding they created a new logo and tagline for the company in association with the advertising agency Ogilvy & Mather. The tagline stated as “Har Ghar Kuch Kehta Hain” that instantly connects with people. To promote their product Apex Ultima Protek, they have started a social media campaign with the hashtags “#Barishkoaanedo” which conveyed the message that the walls painted using Apex Ultima Protek will sustain heavy rains. They have also conducted other social like #DonateAWall to attract customers. Asia paints over the year have used many famous celebrities to endorse their brand for example the famous pairing of brother and sister duo Saif Ali Khan and Soha Ali Khan for brand royale. They are currently in association with Deepika Padukone for their branding and promotional activities. They provided users to upload a picture of their walls and virtually observe different shades of paints on the wall providing feature through their website.

STP Analysis of Asian Paints Introduction-

Asian Paints SegmentationThe company segments its target cohorts based on the following factors  Demographic- age  Geographic- location, geographic region  Psychographic- attitude, behaviour And others group of similar attributes to segment the market.

Asian Paints Targeting strategyDifferentiating targeting strategy- The Company uses this strategy to capture the changing needs of different customer segments.

The company’s positioning – Asian Paints positions itself to be a value-based proposition and usage Class Company thereby communicating its value to the target customer Explanation-

Segmenting, Targeting and Positioning of Asian Paints

CONSUMERBEHAVI OURI NDECORATI VEPAI NTSSECTOR

The following are the most important factors that consumer considers while purchasing paint.

1. 2. 3. 4. 5.

Quality – Prime pre-purchase factor Durability Price Heath Environment

Asian paints have been successful in delivering customers with high quality and differentiated products. It has created its dominating presence with high brand value in the Paint Market. It also has its own strategy and it targets house owners, commercial decorators and building developers prefer to favour this brand over its competitors. It was observed that the frequency of repainting the walls in India is still 5 years so consumers which is evident that Asian paints is still a star.

Segmentation strategy of Asian PaintsThe Decorative Paints Sector of Asian paints has the following products primarily, in which the market could be segmented. Category Exterior Paints category

Product ACE, Apex Ultima, Apex Duracast and more, based on the dynamic demand of a segmented area.

Interior Paints category Ancillary Products Wood Finishes Metal Finishes

Distempers, Enamels, Emulsions primers, putties

Segmentation based on statusEconomic Status of the buyer Upper Middle class Middle Class

Up market buyers and high-quality seekers High income group and socially conscious Low income group and rural market

TARGETING Category Exterior paints

Target Commercial builders, real estate developers and civil contractors

Interior Paints

house owners, interior designers, and building contractors

Category Exterior Emulsions Asian Paints

Interior Paints sector

Example To provide an economical and highly durable paint the company came up with 'gattu or 'cement paint As the interior paints require a smooth, texture based and attractive colour the primers, putties were targeted.

example Apex Ultima- Asian paints targeting premium and economically high target audience through this category. EMULSIONS- The company targets waterbased highly durable paints through this category Eg: Asian Paints offers three brands to choose. Premium - Apcolite Royal Acrylic Emulsion. Medium - Apcolite Super Acrylic Emulsion. Economical - Super Decoplast

DISTEMPERS

For the economic pricing range, the company targets distempers which is very natural and synthetic These are water-based paints and offer a high value for money Eg: Asian Paints has Tractor Acrylic washable Distemper. Tractor washable Synthetic Distemper

As i anPai nt sc anf ol l owsaVTi erCus t omerTar getSt r at egy Tier Tier - One

Tier - Two

Tier - Three

Tier - Four

Tier - Five

Strategy The company focuses on cost cutting measures, productivity and performance improvement for its customers to increase the profitability. This Tier target strategy is for customers who are value based or brand sensitive. Asian paints target these customers with value added VDS integration customer level service. For the customers with price sensitivity and these are mainly targeted for the middle- or low-income groups, brands like UTSAV come under this category. This category is specially for the small manufactures and local companies and to satisfy their needs This tier focuses on the specific targeted groups which are small in size and deserve special attention and are highly innovative in nature.

POSITIONING The company has transformed and repositioned and emerges as a consumer-centric and valuebased paint company. It was observed that the consumer market had steadily been changing, and repainting of houses primarily even during festival seasons was becoming a less dominant trend. Painting became less seasonal and utility based. Instead of the regular painting the consumers became more interested about home décor and home making. The rise in colour consultants and Interior designers also contributed greatly to this trend.

After observing this change in trend Asian paints positioned itself as a part of this high Voltage emotion of home creation It is evident even in advertisements the value based sentiments were the targeting strategy where the company focuses on advertisements where painting a wall is linked with emotions. Visual Identity change Asian paints restructured its image in the mind-set of the target audience by well packaging to get a more contemporary and international look and enhance the visual appeal of the brand. Service Offering Asian Paints enhanced itself into a new dimension of service offering - where it finally delivers not just paint but a painted home.

Company Stats

-------------------------------in Rs. Cr.-------------------------------

YEAR Net Sales

2019 16391.78

2018 14167.86

2017 12647.11

2016 11830.33

2015 11648.83

Profit After Tax

2,134.76

1,894.80

1,801.72

1,597.43

1,327.40

Earnings Per Share

22.26

19.75

18.78

16.65

13.84

Return on Capital Employed

33.96

35.25

35.75

30.14

29.39

Market Capitalisation

148944.23

107469

102970

83297

77820

Dividend

10.50

8.70

10.30

7.50

6.10

Debt Equity Ratio

0.00

0.00

0.01

0.01

0.01

*Note –dividend is per equity share of the face value of Rs.1(Rupee one only) As we analyse company statistics we can say that Asian paints is showing a great development as its net sale, profit after tax, earning per share, return on capital employed, market capitalisation and dividend per share has increased from that of pervious years and the debt equity ratio has remained unchanged that is 0.00 which is strengthening the company financial position as the company is less dependent on the external source of finance which is the reason that Asian paints is listed 18 in Forbes list of 25 most innovative companies

Financial Scenario 

Market capital INR 1.48B INR 148,944.23(crores)



Stock trading at INR 1552.25



Indian promoter’s holdings in company 52.79%



There is a 16.65% holding of foreign collaborators



C...